Privatization and labor policies

Alberto Chong, Jorge Guillen and Florencio Lopez-de-Silanes ()

Journal of Public Economics, 2011, vol. 95, issue 9, 1119-1130

Abstract: Using new data we analyze retrenchment programs before privatization, their effect on prices paid and re-hiring policies pursued by the new private owners. We find evidence in support of skimming and adverse selection. We find that some labor retrenchment policies have a negative impact on net privatization prices, even after taking sample selection bias and endogeneity into account. Some downsizing policies may lead to a higher frequency of post-privatization re-hiring. Skill-biased retrenchment programs are the only ones marginally associated with higher privatization prices and minimal re-hiring rates after privatization. But the political and economic costs of such programs may make them impractical.

Keywords: Privatization; Prices; Downsizing; Labor; Adverse selection; Re-hiring (search for similar items in EconPapers)
JEL-codes: G32 H10 J45 O1 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:95:y:2011:i:9:p:1119-1130

DOI: 10.1016/j.jpubeco.2011.05.014

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